THE PRIVATE SECTOR ARM OF THE ISLAMIC DEVELOPMENT BANK GROUP 3rd International Conference on Foreign Investment in Albania Islamic Corporation for the Development of the Private Sector (ICD) Member of Islamic Development Bank (IDB) Group June 2012
Table of Contents Section 1: Islamic Development Bank Group Section 2: Overview Section 3: ICD Business Lines 1
1. Islamic Development Bank Group
Islamic Development Bank Group : An overview IDB, headquartered in Jeddah,, is a USD 50bn+ bank with 56 member countries mainly located in Asia, Middle East & Africa IDB Group Strategic Objectives: Promotion of Islamic financial industry and institutions Poverty alleviation Promotion of trade cooperation among member countries IDB Group Mission: The Mission of IDB is to promote comprehensive human development, with a focus on the priority areas of alleviating poverty, improving health, promoting education, improving governance and prospering the people. IDB Group Priorities: Human Development Agriculture Development and Food Security Infrastructure Development Intra-trade Between Member Countries Private Sector Development Research and Development in Islamic Economics, Banking and Finance 3
Islamic Development Bank Group : Structure Islamic Corporation for Insurance of Investments and Export Credits (ICIEC) Islamic Corporation for the Development of the Private Sector (ICD) International Islamic Trade Finance Corporation (ITFC) Islamic Research and Training Institute (IRTI) 4
2. Overview
Overview: Mission and Vision The Islamic Corporation for the Development of the Private Sector (ICD), is the private sector arm of the Islamic Development Bank (IDB), a multilateral development finance institution IDB, headquartered in Jeddah,, is a USD 50bn+ bank with 56 member countries mainly located in Asia, Middle East and Africa The Vision of ICDis to be a major player in the development of promotion of the private as a vehicle for economic and social growth and prosperity in Islamic countries The Mission of ICD is to complement the role played by IDB through Providing Islamic financial services and products Promoting competition and entrepreneurship in member countries Advising governments and businesses Encouraging cross border investments ICD was established in 1999 with an authorized capital of USD 2bn and a membership of 52 countries. It is 50% owned by IDB, 20% by public financial institutions and 30% by the member countries 6
Overview: ICD Member Countries MENA West Africa CIS & Europe Central & East Africa East & South Asia South America 1. Algeria 2. Bahrain 3. Egypt 4. Iran 5. Iraq 6. Jordan 7. Kuwait 8. Lebanon 9. Libya 10.Mauritania 11.Morocco 12.Palestine 13.Qatar 14. 15.Syria 16.Tunisia 17.U.A.E 18.Yemen 1. Benin 2. Burkina Faso 3. Gambia 4. Guinea 5. Guinea Bissau 6. Ivory Coast 7. Mali 8. Niger 9. Nigeria 10.Senegal 11.Sierra Leone 1. Albania 2. Azerbaijan 3. Kazakhstan 4. Kyrgyzstan 5. Tajikistan 6. Turkmenistan 7. Uzbekistan 8. Turkey 1. Cameroon 2. Chad 3. Djibouti 4. Gabon 5. Sudan 6. Mozambique 7. Uganda 8. The Comoros 1. Bangladesh 2. Brunei 3. Indonesia 4. Malaysia 5. Maldives 6. Pakistan 1. Suriname 7
Overview: ICD Goals & Strategic Objectives ICD strategic objective is to promote private sector by: helping create jobs; providing Islamic financing capabilities in all member countries; and providing access to financing. 1 million jobs created 1440 Vision 1 million low income families with access to finance 50 Islamic finance channels created / developed Enabling environment in 10 member countries ICD Goals 1 2 channels (financial institution investments) per country by 1440 3,000 enterprises per channels (SME through to corporations in key sector) 10,000 retail users per channel (micro enterprises and lower income families) 70% of resources from the market 1 direct investment per country by 1440 (in sectors outside financial services) 8
3. ICD Business Lines
ICD: Developing Islamic Banks ICD extends its own reach by setting up, investing, financing and providing expert advice to other Islamic Banks in its Member Countries. Focus of Islamic Banks The objective is to develop Islamic Financing Channels by promoting and developing financial institutions. These institutions acts as financial channels for ICD and provide a multiplier effect on the investment dollars Formerly Dawood Islamic Bank USD 28.21 M Pakistan 2005, 2006, 2007, 2011 Tamweel Africa Holding USD 35.3 M Senegal 2010 USD 13.1 M Yemen 2006,, 2010 The focus is to develop the market by establishing and investing in the following type of institutions through control and noncontrol positions: Islamic Bank of Niger USD 2.2 M Islamic Bank of Mauritania USD 26.3 M Islamic Bank of Guinea USD 2.6 M Islamic Banks Ijara Companies Takaful Companies Mortgage Companies Niger, 09 Islamic Bank of Senegal Mauritania, 09 Guinea, 2009 USD 3.0 M USD 3.4 M Senegal Sudan 2003, 2005, 10
ICD: Developing Islamic Financial Institutions ICD extends its own reach by setting up, investing, financing and providing expert advice to other Islamic Financial Institutions in its Member Countries. Focus on Islamic Financial Institutions ICD also invests in other Islamic Financial Institutions in order to promote the development of Islamic Finance as a viable alternative to conventional finance As with banks, investing in these financial institutions will have a multiplier effect and increase the total assets in Islamic products in member countries USD 4.9 M Raising Sole Placement Agent in KSA 2010 Taiba Leasing USD 5.0 M Uzbekistan 2009 Arab Leasing & Investment Company Azerbaijan Leasing Co. USD 6.2 M Azerbaijan 2009 Sukuk Exchange Center Currently, there is a lack of such Institutions in the Islamic countries and Sharia compliant FIs are needed to finance private sector USD 0.75 M USD 6.0 M Sudan USD 10.0 M Bahrain 2006 The objective is to go beyond basic banking and develop nonbanking FIs (e.g. Ijara, takaful) and continue to provide the market with access to innovative Islamic products USD 1.1 M Asean Retakaful USD 3.0 M UAE Malaysia 2005 2005 11
ICD: Provision of Lines of Finance Lines of Finance ICD also provide Lines of Financing to institutions in order to meet common business and social objectives especially the small and medium enterprise (SME) sector Global Line of Financing Bangladesh USD 50.0 M Bangladesh 2011 Global Line of Financing Azerbaijan USD 40.0 M Azerbaijan 2010 Global Line of Financing Tajikistan USD 10.0 M Tajikistan 2010 Global Line of Financing Uzbekistan USD 50.0 M Uzbekistan 2009 Global Line of Financing East-Asia USD 42.0 M East Asia PT Mandala Multi Finance Global Line of Financing Kyrgyz USD 8.0 M USD 3.5 M USD 2.0 M USD 1.0 M USD 4.0 M Indonesia Yemen Uzbekistan Uzbekistan Kyrgyz 2007 2006 2006 2006 USD 2.0 M USD 3.0 M USD 4.5 M USD 800,000 USD 1.7 M Mauritania Mauritania Azerbaijan Azerbaijan Azerbaijan 2005 2003 2003 2003 2003 12
ICD: Direct Investment Apart from investments in financial institutions, ICD supports the development of member countries by investing in companies seeking capital expansion. Scope of Services Sectors Selective Greenfield and Operating Companies investments that have a strong equity story with a potential of major development benefits investment can be through capital increases or buyouts Types of equity investments: Plain Quasi-equity Hybrids (convertible) ICD added value through active participation in the companies boards to support business effectiveness and corporate governance Other Sectors USD 69.0 M Raising & Underwriting Real Estate Al-Laali Real Estate Development USD 25.0 M Real Estate Mauritania USD 60 M Raising & Underwriting Yemen 2005 Healthcare & Pharmaceutical USD 25.5 M Healthcare 2010 USD 5.3 M Healthcare 2005, Gabas Global Biotechnology Company USD 10.0 M Pharmaceutical 2007 Industrial & Manufacturing USD 10.0 M Cement Sudan 2005, 2010 AGCM Industries USD 6.0 M Industrial Algeria 2007 Glass Containers Company (GCC) USD 4.8 M Industrial Sector Egypt 2002 Telecom & Technology USD 10.0 M Telecommunication Indonesia USD 4.8 M Technology Egypt 2004, 2005 USD 2.5 M Telecommunication Sector Yemen 2002 USD 10.7 M Pharmaceutical Jordan 2005 USD 4.02 M Industrial Manufacturing Regional (Jordan) 2001 USD 12.5 M Technology Regional (UAE) 2000 13
ICD: Provision of Term Financing ICD extends Term Finance to clients for capital investments aiming at expansion of existing enterprise, establishment of a new enterprise and project implementation. Scope of Services Sectors ICD provides term financing for Greenfield and Brownfield projects in healthcare, infrastructure, ICT and industrial sectors ICD can act as an underwriter, lead arranger or participant in such term financing projects Other Sectors Horizon Fisheries Project USD 20.0 M Food & Fisheries Maldives 2009 Healthcare & Pharmaceutical USD 6.0 M Healthcare Kuwait 2007 Industrial & Manufacturing Yemeni Saudi Cement Company (Batais) USD 27.5 M Industrial & Manufacturing Yemen Telecom USD 10.0 M Telecommunication Syria 2002 The average size of such financing is between US$ 10-20 million with a tenure of 4-7 years Minimum size of US$ 5m TAB Rig Company USD 43.0 M Oil & Gas Libya USD 13.0 M Healthcare 2006 USD 25.0 M Industrial & Manufacturing Pakistan 2005 USD 10.0 M Telecommunication Yemen 2002 Term finance can be provided through: Non-recourse borrowing (project finance) With-recourse borrowing Royal Atlantic Residence USD 13.0 M Real Estate Gambia 2007 Middle East Healthcare Company USD 10.0 M Healthcare 2000 Queenex Paper Products Company USD 26.9 M Industrial & Manufacturing UAE 2004 USD 12.0 M Telecommunication Sudan 2001, 2004
ICD: Provision of Short-Term Financing ICD provides short-term financing for companies where cash flow from operations is not sufficient to keep up with their growth-related financing needs. Scope of Services Sectors Providing liquidity to corporations with development benefit to its country Healthcare Real Estate Oil & Gas Industrial & Manufacturing The tenure for short-term loan can be up to 2 years USD 5.0 M Healthcare 2007 USD 5.0 M Real Estate 2009 USD 5.0 M Oil & Gas Bangladesh 2009 USD 14.0 M Industrial & Manufacturing Syria 2004, 2007,, 2009 This facility can be provided through: Trade finance Working capital Bridge finance Al-Shiddi Real Estate Company USD 5.0 M Real Estate 2009 PT Dimas Utama (Geothermal Project) USD 5.8 M Oil & Gas Indonesia, 2009 Yemen Steel Manufacturing Company Ltd. USD 6.0 M Industrial & Manufacturing Yemen 2007, 2009 Canadian Engineering Western Co. USD 5.0 M USD 5.0 M Oil & Gas Industrial & Manufacturing UAE Jordan 2004 2005, 2007 USD 5.0 M Industrial & Manufacturing Jordan 2005
ICD: Advisory Services ICD has put together a team of highly experienced investment bankers to support Advisory transactions. Making available of its full resources to ensure a successful outcome of any transaction it undertakes. Scope of Services ICD provides a wide variety of advisory services to governments, public entities and private entities of member countries in order to help create the right environment to facilitate private sector investment and also to assist companies in achieving their potential Restructuring & Capital Raising Financial Advisor 2011 USD 100 M Murabaha Financing Facility Joint Lead Arranger Financial Advisor 2011 Range of Services for Government Privatization Public Private Partnership (PPP) Project Finance Advisory Government Sukuk Capital Raising Development of Islamic Capital Markets Development of Business Environment for SME USD 590 M Structuring & Placement Agent Financial Advisor 2011 Government of Senegal USD 200 M Sukuk Issuance Financial Advisor 2010 Range of Services for Private Sector Strategic Advisory / Restructuring Advisory Access to Growth Capital Project Finance Advisory Development of Islamic Financial Institutions USD 11.7 M Setting Up The Bank, Raising & Underwriting Financial Advisor 2010 USD 460 M Raising Financial Advisor 2010 16
ICD: Asset Management ICD establishes and develops specific Financial Instruments to support the growth of targeted sectors in its member countries. Scope of Services ICD supplements its own balance sheet by sponsoring / creating private equity funds as well as other special purpose vehicles in order to provide the IDB Group and other investors with access to projects that provide commercial returns as well as meet the developmental needs of member countries ICD acts as a fund manager and/or general partner with other fund managers to sponsor and create special purpose vehicles along with third party investors including but not limited to IDB and ICD; other Multilateral Agencies; Sovereign Wealth Funds; Government Funding Vehicles and High Net Worth Individuals Types of Funds Medium and Short Term Working Capital Funds Energy Funds Infrastructure Funds (Project Finance and ) Food and Agriculture Funds Real Estate Funds (Middle Income and Affordable Housing) SME Funds Renewable Energy Fund (to be launched) USD 250 M Energy Sector Renewable Energy Investments In Member Countries 2012 ICD Housing Development Fund (to be launched) USD 500 M Real Estate Sector Affordable Housing Investments In Member Countries 2012 SME Fund (to be launched) USD 250 M All Sector SME Investments In Member Countries 2012 UIF (Unit Investment Fund) USD 250 M Investments in Member Countries Regional 1995 17
Thank You Contact icd@isdb.org myandiev@isdb.org P.O. Box 54069 Jeddah 21514 Kingdom of www.icd-idb.org